Others News
- Danone China JV chairman resigns
Date: 11-Jun-2007 Sources: (Shenzhen Daily)
DANONE'S legal battle with its Chinese partner Wahaha took a new turn Thursday when the chairman of the partners' beverage joint venture resigned, accusing the French food group of damaging his reputation.
Zong Qinghou's resignation follows allegations by Danone, maker of Evian bottled water, Activia yoghurts and Lu biscuits, that its Chinese partners violated a contract by using the Wahaha brand name on products sold outside the joint venture.
In an open letter to Danone chairman and chief executive Franck Riboud, Zong listed a series of complaints, including his low salary and difficulties in cooperating with Danone directors in China. A Danone spokeswoman declined to comment on the content of Zong's letter.
In an earlier statement, Danone said Wahaha Joint Ventures vice chairman Emmanuel Faber, who also heads Danone's Asian operations, would temporarily replace Zong.
Danone owns 51 percent of a joint venture with Wahaha, China's largest beverage company, which is based in the eastern Chinese city of Hangzhou.
Wahaha, Danone says on its Web site, is among the most popular brands for water, ready made tea or fruit juices in China, with annual sales of more than 1.5 billion litres of water.
'Danone has been in contact with the Hangzhou government on the matter of management continuity at the Wahaha Joint Ventures and trusts (the) government will continue to show support for a smooth management transition, both as regulatory authorities and as a significant minority holder in the Joint Ventures,'it said.
Danone on Tuesday announced it filed a lawsuit in California against its partner for alleged breach of a 1996 contract by using the Wahaha brand on products sold outside the joint venture. It had already filed for arbitration in Stockholm, Sweden, to solve the dispute.
In his letter, sent to reporters by e-mail, Zong said he had resigned because of the behavior of Danone's two directors in the joint venture, which he said had greatly hurt his reputation and feelings.
'It (Zong's resignation) is a step forward but Danone is not out of the woods,'said a London-based analyst who declined to be named.
Sponsor Results:
